Blog by Mark Longpre

Slower housing market

VANCOUVER — Canada Mortgage and Housing Corp. forecasts that Metro Vancouver housing markets will slow more than it initially expected owing to the rush of pre-HST sales and expectations that mortgage rates will rise, a report released today indicates.

Canada Mortgage and Housing predicts that Metro Vancouver will see 34,000 sales in the region's home-resale market by the end of 2010, a 6.2-per-cent decline from 2009. And that’s down from the forecast of 35,000 sales the national housing agency released in May.

For 2011, Canada Mortgage and Housing is forecasting 33,000 Metro Vancouver sales, a decline of almost three per cent from 2010.

“Two factors had moved some sales and starts forward in 2010,” the report says. “The first includes the [HST] implementation July 1, and the second relates to the widely held expectation of gradually rising mortgage rates during the second half of the year.”

Over the longer term, CMHC expects that gradual economic recovery and population growth from immigration to support stable housing demand through 2011.

“As the provincial economic recovery gains traction, job gains will shift to full-time from part-time, bolstering income growth and home ownership demand,” the report says.

Canada Mortgage and Housing is forecasting that Metro Vancouver housing starts will hit 12,000 for 2010, up almost 44 per cent from 2009's collapse of starts. For 2011, the agency predicts Metro starts will rise to 14,000 units.